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Why does the Net Present Value change depending on discount rate being used?

Why does the Net Present Value change depending on discount rate being used?

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Answer #1

Net present value is the sum of present value of cash which is spent or received.

Each such future cash inflow and outflow is discounted at a given interest rate to measure or sum the present time value of money.

The equation for calculating NPV is FV/(1+i)^n

The discount rate for calculating the NPV is a key input and it is the interest rate which is used to discount the future cash flows to yield their present value and  a higher discount rate will lower the value of NPV so,as the discount rate changes,the value of NPV changes.

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